Ref: 220-22-11.1

November 2022

eVTOLs

Do car makers hold thekeys to eVTOL growth?
10-minute Insight
AeroHT, an affiliate of Xpeng, staged the first public flight of its
X2 Electrical Vertical take-off and Landing Vehicle (eVTOL) inDubai. Saudi Arabia has also announced the first large-scaleorder of eVTOLs for use in urban cities.

The concept of flying cars has captured the public’s
imagination for decades – scaling up eVTOLs from prototypes
to mainstream mobility services is likely to take decades.
However, the race has started, and car makers may have abigger role to play than is often assumed.
In this insight we analyze the progress towards deploying
eVTOLs and how car makers could leverage theirinvestments in electrification to help eVTOL
manufacturers scale-up.

Target audience
Engineering / Strategy

Focus market(s)GlobalMarketing/ Product Planning1

What is happening?
Major VTOL announcements from car makers

Aug 2017
Mercedes invests
in Volocopter

Jan 2021
Stellantis enters
into a partnershipwith Archer

Jan 2020
Toyota invests$394m in Joby
VTOLs20172018

Jan 2022
GM unveils VTOLconcept

Sep 2021
Geely enters into
JV with Volocopter

2019

Key takeaway

Oct 2022
Xpeng’s X2 VTOL
makes first publicflight2021• Based on the Vertical Flight Society,there are over 700 concepts around
VTOL, with designs from nearly 350
companies catalogued• Some of these companies havesubstantial backing from establishedplayers in other industries, such as
Xpeng (HT Aero), GM (Lilium) andAirbus, (City Airbus)

Jul 2022
Hyundai unveils
VTOL concept

2020

Various car makers are exploringeVTOLs as a new diversification
opportunity for future revenue. Theirintent is to become a bigger part ofthe multi-modal mobility ecosystem.

• Xpeng and Hyundai are among themost advanced car makers in thisspace and are building up in-house
expertise and capabilities to develop
and test prototype eVTOLs.

2022• Ultimately it may end up being theautomotive industry’s heavy
investment in electrification that gives
them an edge in the eVTOL market.
2Why does it matter?
The automotive industry is far ahead in terms ofcommitted investments towards electrification

Key takeaway
Car makers have an opportunity toleverage their electrificationinvestments to gain a strategic
advantage in the emerging eVTOLmarket.

$5Bln
>

$500BlnCommitted investment frommajor car makers

Source: SBD Automotive, 2022

Committed investment fromaerospace industry• So far the early stages of the eVTOL
race have been dominated by startups like Velocopter and Joby.
• These companies have led the way in
optimizing vehicle designs, gaining
regulatory approval and exploring
commercial applications (including
city transport, cargo and agriculture).
• The first concrete eVTOL deals are
now being signed, which will require
these start-ups to begin ramping up
production – but most do not yet
have mature supply chains to source
electric batteries.
• This is where car makers have anadvantage – in their rush to deploy
BEVs, car makers are investingheavily to secure access to the raw
materials required to developbatteries.
3

Where next?
Key takeaway

1
Certification

Earlyadopters

FutureOutlook

MaturetechCity
ramp-up2

Early orders are already in – other cities(particularly in Asia & Middle East) areexpected to follow, but with initially limitedvolumes.

3

Further improvements to various parts of thetech stack over the next 5-10 years (batterycells, noise reduction, automation) will makescale-up more viable.

4Expect a gradual city-by-city launch scenario, as
local approval and infrastructure partnerships
take time to build. City restrictions on private carownership could accelerate deployments.

MassAdoption
51-5yrs

5-20yrs

The eVTOL regulatory framework is still
nascent in most markets, making it hard forcompanies to homologate and launch services– this is the main short-term priority for thesector.

The eVTOL vision of a fully-integrated multimodal experience available across (andbetween) cities globally is unlikely before
2050.

eVTOLs face a multi-decade climb
towards becoming a mainstream
form of transportation globally – butthat climb is already underway.
• According to a report published by
Rolls Royce and Rolland Berger, only
7,000 VTOLs are expected to be inoperation by 2030, each generatingaround $300k in revenue. By 2040
50,000 are expected to be operating
globally.
• This slow growth reflects theregulatory challenge of gaining
approval and commercial challengesof building up physical infrastructure(vertiports and air trafficmanagement).
• An important enabler to further
increasing the addressable market
and growth of eVTOLs will be battery
technology: even if the range
requirements remain similar to BEVs,
eVTOLs will need >200kWh capacity
due to extra weight andsafety/redundancy requirements.

>20yrs4

Who to watch out for?
Key takeaway

HT AeroVolocopter

LiliumJoby

City Airbus

Kitty Hawk

Headquarter

China

Germany

Germany

USAFranceUSAFoundedDate2014

2011

2015

200919702010

FundingStatus

Early Stage
VentureEarly Stage
Venture---Early Stage
VentureLast
Funding Type

Series ASeries E

Post-IPO

Post-IPO

Post-IPO

Grant# of Employees

501-1000

501-1000

501-1000

501-1000

10,000+11-50

FundingRounds

1878-

2

Total
Funding$500M$780.6M$826.4M

$1.7B

-

$1M

# of Lead
Investors

3846-

2

# ofInvestors

826

1324-

2

Source: Analysis of Crunchbase database, Q4 2022

The eVTOL ecosystem is alreadycrowded, despite the limited shortterm commercial opportunities foroperators.
• Building and prototyping eVTOLs is acapital-intensive venture – those thatare still operating pilots are having toraise larger sums from investors aseach milestone in the race for urban
air mobility is a costly one.
• SBD believes a pressure to raise
capital combined with a realizationthat VTOLs are taking longer tocommercialize, will lead to a ramp upof M&A and closures.
• This will create opportunities forcompanies with longer outlooks anddeeper pockets.
• The players shown here are ones thatlikely have a path to longer-term
success – ones that are worth
monitoring for partnerships, deals,
sub-sector expansions andtechnological breakthroughs.
5How should you react?

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3Monitor
The eVTOL sector will not take off on a massscale in the short-term. But monitoring key
players and their progress will help outsiders
gauge whether commercial opportunities will
emerge within the next decade, or whether
resources are better spent elsewhere.

PartnerGiven the long timescales and complexities oflaunching eVTOL services, the appetite forpartnerships across the eco-system is high.
Car makers and Tier-1 suppliers have a lot tooffer and a lot to learn, making partnerships anatural first step.

AlignIf eVTOLs becomes a strategic priority forplayers in the automotive sector, existing
mobility strategies will need to be adjusted toaccommodate the additional requirements of
air travel (e.g. investing in extra battery
capacity that may not be required for BEVs).

Authors
Andrew Hart
CEOEdward Paez
Specialist

Related SBD Reports
Ref:201
Innovation
Guide

Ref:211
Disruptor
OEM Guide

Related SBD Consultancy▪ Due diligence▪ Partner selection▪ Product planning support▪ Acceptance and validation testing

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